Business & Investment / CAD-Canadian dollar weakening ahead of Jobs data

OPEC agrees to increase 400,000 barrels / day in January

・ Strong employment reports in the US and Canada are expected

Hawkish comments from Fed officials raise US dollar

USDCAD Open 1.2837-41, Overnight Range 1.2805-1.2844, Last Close 1.2806, WTI Open $ 68.17, Gold Open $ 1771.40

The Canadian dollar remains defensive, despite expectations of a rebound in oil prices and strong domestic employment reports.

West Texas Intermediate (WTI) has rebounded from a low of $ 66.47 / barrel to $ 68.68 / b overnight in Europe, which looks like an example of a “sell rumors, buy news” textbook. WTI plunged 20% m from $ 78.25 / ba a week ago to $ 62.95 / b yesterday. Traders were afraid of new travel restrictions due to Omicron variants, increased production by OPEC, and oversupply of oil due to plans by the United States, China, Japan and the United Kingdom to release their strategic petroleum reserves. The bargain hunter has decided that the price cut is too fast.

The Canadian dollar has fallen with lower oil prices, but has not yet benefited from higher prices. Traders are waiting for US and Canadian employment data. In Canada, employment of 35,000 people is expected to increase and the unemployment rate is expected to drop from 6.7% to 6.6%.

NFP forecasts in the United States that employment will increase by 550,000 in November and the unemployment rate will drop from 4.6% to 4.5%. This is what many consider to be a “full employment” level. Analysts suggest that wage / price spirals are a concern, so the focus will be on the average earnings factor.

The US dollar is in demand for the G-10’s major currencies as the Fed is expected to raise interest rates in May or June. These expectations were strengthened yesterday after the Fed’s chairman Mary Daly said a series of hawkish comments from Fed officials said authorities might need to plan for a rate hike. .. “It may be appropriate to move the lift-off completely forward,” said Bostic, the governor of the Atlanta Fed. The Fed’s president agrees with others who admit that if inflation remains high, they are “in a position to raise it as needed.”

Their remarks come shortly after the hawkish shift of Federal Reserve Chair Powell during this week’s parliamentary testimony.

EURUSD was traded in the band 1.1283-1.1314, with dovish comments from ECB Governor Christine Lagarde squeezing prices, saying that next year’s rate hikes are unlikely. PMI data for Eurozone and German services was not a factor.

GBPUSD was in the 1.3270-1.3300 band. Prices fell when BoEMPC member Michael Saunders said rate hikes should be delayed until more data is available from the new Omicron variant.

USDJPY bounced back at 112.97-113.48. Demand for safe shelters for the yen and the Treasury has created weaknesses that weigh on prices, while hawkish Fed comments and widespread appreciation of the US dollar provide support.

AUDUSD and NZDUSD fell due to widespread demand for the US dollar. / CAD-Canadian dollar weakening ahead of Jobs data / CAD-Canadian dollar weakening ahead of Jobs data

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